Every little helps….

It’s easy to see reasons for Reader’s Digest’s losses – this is a business in very major transition after all – but why should Good Housekeeping, Good Food, National Geographic and others all suffer quite big falls? These are titles that have invested heavily in subs over the past few years and are good at getting them, and good at renewing them.

But these are also all titles that have done well from the Tesco Clubcard scheme where you swap your Tesco points for magazine subscriptions. For many people this is almost the equivalent of getting free magazines as the transaction doesn’t involve any actual cash. And the titles were very cheap (e.g. a year of Heat for £30 of vouchers).

Tesco were doing hundreds of thousands of these subs at their peak, but perhaps the fall in the subs of the big brands is a straw in the wind. There are a couple of explanations:

These subs didn’t generate much revenue for publishers (no one has ever accused Tesco of being generous) and terms were renegotiated (in Tesco’s favour, naturally) a year or so back. It’s also known that renewal rates on these subs are really very, very low. So explanation one is that publishers are weening themselves off what was a very low margin, high volume circulation boost. If yield/cash/profit is more important than ABC, then publishers are taking a short term circulation hit for longer term profits.

The second explanation is that the Tesco scheme isn’t delivering the volume that it used to, which means that the circulation rug is being pulled from under publishers’ feet.